Examples of bad financial decisions nearly everyone makes and how to avoid them—part 3 of 3.

Sign up to our Wealth, Health and Happiness newsletter and get your free gift
What is aggregate planning? - 3 str... x
What is aggregate planning? - 3 strategies for aggregate production planning
Is 100k savings a lot?

Examples of bad financial decisions. Fill your boots 

Ohhh come-on this is getting ridiculous now!! Once would be a mistake, twice is careless but a third time is an act of self-harm.

Here are some more common poor financial decisions you may have made, but hopefully you can now avoid yourself and help others avoid them.

Financial mistakes to avoid


Safety is my middle name.

Ignoring the problem: the ultimate example of a bad financial decision. 

What problem? I don’t have a money problem. I have a lack of money problem, which is the problem.

I have too much month at the end of my month.

A friend of mine once said it was like a health issue. They knew they should be looking for lumps in certain sensitive areas of their body, but they sort of couldn’t be bothered and sort of didn’t want to know even if there were lumps. They would rather ignore the problem until they are forced to deal with it.

Fine, but that method is going to involve a lot more pain than looking for lumps every day.

The pain of discipline over your finances or the pain of regret. You choose.  

How to avoid this poor financial decision

  • Start tracking your spending; see where it is all going. Are you happy with that?
  • Check your payslips to see what is coming in. does it look right?
  • Look at your statements every month.
  • Review your net-worth every year. Is it going up?
  • Is your debt growing? or are you paying it off and a what rate?
  • Put a plan together to manage your money.

Spoiling your children 

Only the best for my kids they will want for nothing.

Spoiling them is potentially a ruinous route for your bank balance and your child’s future bank balance. Spending like this may well be training your children to spend like this into their future.

Getting them everything they want with everything coming so easy might well be setting them up for future financial problems as they are unable to defer buying things or saving up for them. They might well be conditioned for instant gratification and the financial pain this may bring.

How to avoid this financially bad decision 

  • Keep things in perspective – for the first 6ish years your children are unlikely to be able to tell brand named or brand-new goods form second-hand stuff. Unless of course brand names are all you talk about, then you are probably already teaching them to want them.
  • Think about pocket money – will it be for free or as a result of chores?
  • Will you encourage or make them, save, invest and give away a % of all the money they receive to start building these habits?
  • Make them contribute to anything they want or at least feel like they have earnt it in some way.

Inheritances – don’t count on them

My parents are going to pass done their wealth.

Grandma has promised me some money in her will.

I have seen the will and what I will get.

These may all be true, but there are so many curve balls that can come in the way of you and expected inheritance.

To name but a few things that might mean there is nothing left, or it swerves around you

  • Unexpected care costs – living in a nursing home is costly. Will there be anything left?
  • The second or third marriage which sees some or all of the pie goes in a different direction
  • Grandchildren inheriting a significant chunk, meaning it skips a generation.
  • Updates and changes to the will you were not expecting   

How to avoid this financial mistake

  • Don’t count your chicken until your eggs have hatched.
  • Put your mask on first, and don’t wait for someone else to rescue you. Its highly likely no one is coming to the rescue, family friend or the state.
  • Ensure that wills are kept up to date to reflect any significant changes.
  • Talk with your parents to understand what their wishes might be so that there aren’t any nasty shocks later on.
Financially Happy


Of course I can rely on it

You don’t haggle/look for better prices

Don’t you want to haggle?  You know, ten for that you must be mad!

I can’t be bothered to haggle. It’s embarrassing and awkward.

Will I actually save that much anyway?

Who knows until you try but the likelihood is you will be able to keep more of YOUR MONEY than you would have handed over without at least asking.

If you do it with a sense of humour and realism then the seller and you can part on good terms if they say no.

How to avoid this bad financial decision 

  • Don’t buy something from the first place you see it. This slight delay might also help you save all the money because you might realise you don’t need it. But if you do, try and find three quotes and compare which offers the best value.
  • Haggle every time you renew a service, electricity, gas, broadband, mobile phone etc. Take a few minutes to scan around the leading competitors and get some quotes from sites like Gocompare and Compare the meerkat. Use this info to haggle for a better rate.
  • Money-saving expert often has excellent tools to compare offers.
  • Check out these cashback websites which might help you earn some additional income while providing costs comparison alternatives to your current provider. Topcashback* and Quidco*

You don’t enjoy your money

Beans again tonight?

Maybe you’re not spending money on things you actually enjoy or get value from.

Or on the flip side maybe you’re not spending enough of your money on the things you do enjoy.  

This is where your frugality has got the better of you, and it might be making you miserable.

In your budgeting spending plan, you could or should look for some fun things to enjoy your money on. It could be small, a nice coffee, a book or a big thing like a weekend away.

If it’s clear you have the money and you don’t have to think about can you afford it, could you enjoy your money?  

How to avoid this financial mistake

  • Figure out what you want, what you really really want and spend money on that
  • Figure out what your values are and spend your money on that.
  • Figure out the difference between your needs and your wants.
  • Remember what you really want vs what you want right now and spend money on that.  
  • Have a splurge fund. A stash of money just for fun, no gilt no regret. Enjoy it, as long as it’s legal, and you have got three quotes (only joking).

You don’t invest in yourself. A classic example of a bad financial decision. 

The only thing I read now are menus.

When was the last time you read a book for learning? And particularly for your financial knowledge?

Learning should be lifelong. I’m afraid I don’t think you learnt everything at school, college or university. That likely equipped you with the ability not to get run over crossing the road but had limited lasting impact on your financial literacy.

I’m guessing you wouldn’t want your dentist, plumber or mechanic to stop learning the moment they left their education. I bet you are hoping the dentist is continually updating their pain relief knowledge and the mechanic their mechanical safety awareness.

If this is the case, why aren’t you updating your skills every year technology-wise, sector-wise and financially wise?

Keep learning to improve yourself even if only by one per cent every day.

You are your greatest asset, why not keep improving your ability to earn, manage and grow your wealth.

“Formal education will make you a living; self-education will make you a fortune.

Jim Rohn

How to avoid this bad financial decision 

  • Find the next relevant course in your field of work, interest or hobbies. Is now the time to upgrade your skills?  
  • Find podcasts in your professional area or an area you would like to know more about.
  • Find books or audible books in your chosen interest area
  • Ask trusted friends or colleagues what they read to improve themselves.
  • Search on google “the best books for ……” whatever you want to learn about.
Financial mistakes to avoid


I’m going to eat all your money, ha ha

You forgot kids are expensive

How much can a baby eat? More and more each day and it’s not just what they eat but what comes out the other end that is going to cost you. Probably for at least 18 years.

I believe kids are like boomerangs nowadays and come back to live with you even after they have left for university or their first job. You may never get rid of them!

Childcare costs are a massive drag on your finances.

Some people say they would never pay private schooling fees even if they could. Well, childcare is more or less about the same as private school fees up to the age of 5 ish.

How to avoid this bad financial decision 

  • Realise and accept kids are a terrible financial decision and start saving NOW.
  • Figure out what the costs might be especially childcare costs out this into your budget and see how it affects everything else
  • Make yourself aware of any government, employer or private childcare schemes than can provide support with the costs.
  • Tap into your local parent networks and nearly new sales. Facebook can be a useful resource for finding local events, sales and get-togethers, which are far cheaper than regular shops.
Financial mistakes to avoid


Despite the crippling debt it was a great day, wasn’t it?
You have a blowout wedding and are paying it off for years.

It’s going to be the event of the year. All my relatives, Facebook and LinkedIn friends have been invited. Everyone is getting favours and ribbon covered chairs blah blah blah at a rate of £250+ per person.

And we got a loan at a rate of only 19%!! / myself and my parents are selling a kidney and lung to cover the costs.

Weddings are expensive. The number of guests raises costs exponentially.

Wedding dress, suit hire, photographer, videographer, 3-course meal, alcohol, venue hire, ceremony fees, car hire, disco, entertainers, after-party meal, honeymoon and on and on its goes.  

How to avoid this bad financial decision 

  • It’s a big day in your life and should be treated as such – but it is only one day in your life. Reflecting on this perspective might save you a lot of time, money and stress.  
  • Have the things that you really want and value at your wedding not what other people had at their weddings. Have the chocolate fountain, ice sculpture and magicians because they mean something to you not because someone else had them.
  • Started saving and budgeting for a wedding as soon as you know its coming and then have the wedding you can afford.
  • Can you save money by making it smaller, borrowing things, doing it on a weekday anything to get some do the costs paired down and within the perspective of your financial reality?

You make the minimum payments

I can afford it or are you saying you can afford the minimum payments.

Your debt can quickly grow out of control and all proportion to what the item you bought cost. This is because you are still being charged a likely high-interest rate when you just make the minimum payment.

Buy making the minim payment you are setting yourself up to pay way over the odds for that must-have and stretching out that debt into the months, years or even decades ahead for large purchases.

Why store all this negative energy up for yourself?

How to avoid this bad financial decision 

  • Use credit cards carefully. Understand what it costs to use credit and minimum payments.
  • Automate your payments – take the decision making out of it.
  • Figure out what this method is costing you in time and money – when does it mean you will pay off the debt and what will that debt have cost you in time and money?
  • Pay the cards off in full
  • Only use cash, thereby feeling the pain of buying the item but knowing it is truly yours.
  • Only buy what you can afford. If you have to ask “can I afford it” you probably cant.
Financially Happy


Ha Ha Ha, that’s the funniest compound interest joke ever

You have not invested in your financial literacy

Reading is for wimps; we all know that, right?

Err nope. I love libraries. Just thought I would get that out there.

A library is a place full of all the world’s greatest learning… FOR FREE. All you have to do is get a library card and start reading.

Now the next step is to at least occasionally read books that have practical, spiritual, psychological and social applications to name but a few life lessons to learn. 

There are lies dam lies and statistics but here goes. 51% of UK adults read a book in the last year (the year being 2018). Let’s say that’s broadly true and that means 49% or thereabouts didn’t read one book in 2018………….hmmmmm.

Now maybe we can take out those unable to read for many reasons, very old, ill health, poor reading ability. It still seems like a lot of people haven’t read a book in a year.

Then you add the fact that a lot of the people who were reading may well have been reading fiction. I would imagine the number of people reading personal finance books drops even further.  

So let’s say adding one personal finance book to your reading list would not be impossible. But if it was, you can, of course, listen to books, podcasts or YouTube videos to start improving your financial literacy 1% each day.  

“It isn’t what the book costs; it’s what it will cost you if you don’t read it.”

Jim Rohn

How to avoid this bad financial decision 

  • You are now spoilt for choice. Find your style of podcast, Youtuber, book or audiobook* to take your financial literacy to the next level. Here are a few resources that might be of interest Link
  • Remember the first time you hear a concept it might sound like gobbledygook but the 2nd and 3rd time it will become more familiar. Think like a learner you are exploring how to manage YOUR MONEY better, so cut yourself some slack and keep learning.
  • Yes, many people may be DUMB (Don’t Understand Money or Business), but do you have to be one of them?
  • Go one read one book I dare you! or even better get the author to read it to you with Audible*
Financial mistakes to avoid


The only thing I can be bothered to do is spend money

Not reviewing your standing costs every year – utilities, internet etc

I bought whatever I bought, and now can’t be bothered to check it. The electricity is on so why should I bother changing it?

I know many of us think our greatest strength is our apathy, but it may also be your greatest weakness.

You have just got used to the pain or creeping costs. In fact, this is what most companies are counting on that you will do nothing.

Remember it’s your money they are taking. ITS YOUR MONEY.

Its takes about 20 different minutes to compare a few different internet, electricity or whatever providers. If you sign up with them, they will then often sort out all the rest for you. Saving at least £5 a month on your current provider is probably not going to be that hard. Over a year that’s £60 of YOUR MONEY earnt in 20 minutes. Not a bad return.

How to avoid this bad financial decision

  • Funnily enough it’s reviewing your standing costs every time they come around for renewal. Go to a comparison site and compare what’s out there.
  • Remember its YOUR MONEY they are taking, why not try and keep as much of YOUR MONEY in your pocket as you can.
Financially Happy


It was a bargain. It was only really expensive and not ridiculously expensive

Living beyond your means

I want it because I’m worth it. Well sort of, actually I just want it.

Faux rich is a widespread trait now. You don’t have to be rich to look rich; you just need to be able to afford the minimum payments, and then you can have what you want.

Here is the eternal trade-off what you want most vs what you want now.

  • I want six-pack abs, but I want cake now
  • I want more free time, but I want an internet of things across my house now.
  • I want more freedom, but I want a new car, boat, “add an item here” now.

All of these are a trade-off for better or worse. You have to figure out what the cost is now and later.

One concept to think about is that money is like stored energy. The more money you have, the more energy you can release on the things you really like and value.  The more energy you have, the more choices you have.

The opposite must also be true then, right?

Debt must surely be negative energy stored up. This negative energy must be sapping your ability to make choices now and ongoing into the future. The bigger the debt, the bigger the negative energy and ultimate point when the price for this must be paid.

Paid either in cash or in limiting your choices in the near or distant future.

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.”

Jim Rohn

How to avoid this bad financial decision 

  • Track your finances – Understand where it’s all going, and if you’re happy with that.
  • Get a spreadsheet, your bank and credit card statements or an app like Moneydashboard* to review where your money is going. Categorise them into at least three columns
    • Subsistence – keeps you alive, housing, food, travel
    • Discretionary – you don’t have to spend this, but you are deciding you want to
    • Luxury – you’re spending this purely because you want to.
  • Set a savings goal for yourself. Save first and then spend what’s left.
  • Pay yourself first. Think about how much of the money you worked for do you want to keep and how much do you want to give/spend away?
  • Do you want to look rich or be rich?
  • Accept that some people are richer than you, have more stuff and more expensive stuff.
  • Try and earn more??? but be careful of lifestyle inflation.

“Don’t confuse the cost of living with the standard of living”

Warren Buffet

Not tracking your finances

I cant be bothered to look. its probably all going ok. Look how much I earn.

How much do you spend though?

Is your company paying you the right amount?

How much is going into your savings, pension and investments? if any at all. What do you think this will add upto in 5, 10, 20 years. Will it be enough? Enough for what?

Without tracking you don’t know if its good, bad or downright ugly right now and stretching far into the future.

How to avoid this example of a bad financial decision

  • Go on get a spreadsheet out you know you want to – sort of. Add in your expenses to see what’s going on.
  • If you want to make it really easy get an app like Moneydashboard* to track it for you. Then review is it going where you want it to.
  • Figure out your net worth – all you own vs all you owe.
  • What’s your freedom number?
  • How much of an emergency fund do you need?

Read more examples of bad financial decisions and how to avoid them in Part 1 and Part 2

Are there any other examples of bad financial decisions that I have missed across the three blogs?

FAQ: Bad financial decisions

Making poor financial decisions can have a negative impact on your overall wealth and security. Here are some tips for avoiding bad financial decisions:

1. Be aware of your spending patterns and track your expenses closely.

2. Make a budget and stick to it.

3. Avoid impulse buys and be mindful of what you’re buying.4. Educate yourself on personal finance and investing.

5. Seek professional help when necessary.

6. Have a long-term perspective and focus on building wealth over time.

7. Understand your risk tolerance and invest accordingly.

8. Live below your means so you can save more money.

9. Make smart financial decisions every day, including spending wisely and investing in your future. By taking these steps, you can avoid making costly financial mistakes and stop yourself from falling into a debt trap.

10. Improve your financial literacy through books, blogs and podcasts and even working with a financial coach or planner.

Want to avoid these bad financial decisions or recover from them?
Would having a GAME plan or financial coaching help understanding your money and life needs? 
  • Is your life, job and financial admin in a mess?
  • One or two months away from financial disaster if you quit?
  • Not enough time or money to achieve what’s most important to you?
  • No idea how to plan, save and invest to become financially secure?  

What’s likely to be the outcome if you don’t make some serious financial plans and start saving?

Without making some clear plans you are at real risk of having nothing to fall back on when things change for the worse. 

Financial life planning and coaching will give you the support, guidance, and accountability you need to succeed with money and life, building your savings and wealth.

  • Get you financially organised
  • Build your savings cushion for when things go wrong
  • Help you figure out how much money is enough
  • Help you understand and build wealth to never run out of money

Start building your money confidence now because waiting will only make it more expensive and painful to achieve later.

Plan, build and enjoy your money.

Taking you from life and financial crisis to happiness.

Contact us here for a free chat about building your money confidence and what options you might have for creating wealth in every area of your life.


Subscribe to our monthly newsletter

* indicates required

Leave a Reply